LONDON (AP) -- By boosting production ahead of the war in Iraq, OPEC succeeded in allaying concerns about a possible oil shortage once the shooting began. Yet instead of celebrating its achievement, the producers' cartel fears the world is now awash in crude and at risk of a ruinous price crash.
The Organization of Petroleum Exporting Countries has called an emergency meeting for Thursday to assess postwar conditions in the oil market, with a view to slashing output to bolster sagging prices. OPEC President Abdullah bin Hamad Al Attiyah has said he believes the world is oversupplied by 2 million barrels a day at a time when seasonal demand normally slips to its lowest level of the year.
However, energy analysts warn that crude inventories in major importing countries are still alarmingly low. They argue that OPEC must be careful not to curb production so much that refiners face low stocks of oil as they head into summer, the peak season for gasoline consumption.
OPEC has timed its meeting in Vienna, Austria, to assess market conditions in the immediate aftermath of the war. This won't be easy, and some analysts argue such a meeting is premature.
No one knows when Iraq will be able to resume its crude shipments. Nigeria and Venezuela, meanwhile, are still clawing their way back to production levels they enjoyed before social unrest and a national strike, respectively, dented their output.
OPEC's members agreed in January to a production target of 24.5 million barrels a day. They soon were busting their quotas, to profit from the high prices and reassure markets.